Lawmakers, former Customs head push pre-shipment inspection of import cargo

MANILA, Philippines - The passage of  a proposed measure that seeks to modernize and align the country’s customs procedures with global best practices has hit  a snag as lawmakers are in a bind over the Advance Customs Clearance provision of the bill.

The Customs and Modernization and Tarifff Act, which was passed by the Lower House in third reading, faces uncertain future with lawmakers at loggerheads over a provision that calls for a voluntary pre-shipment inspection for all containerized cargoes.

Some lawmakers have expressed concern over a proposal to revive pre-shipment inspection for Philippine-bound shipments, saying this could become another burden to legitimate businesses in the country.

Buhay party list Rep. Lito Atienza, who sponsored the inclusion of the advance customs clearance provision in the CMTA, clarified the pre-shipment inspection scheme is voluntary and therefore the business sector has a choice.

 While the program may be voluntary, the proposed measure gives the Customs commissioner an option to recommend the mandatory implementation of the pre-shipment scheme after conducting a public hearing and issuance of the  necessary implementing rules and regulations.

The pre-shipment inspection scheme was enforced in the 90’s but was terminated in 2000 because it was overtaken by the Philippines’ commitment to the World Trade Organization which disallowed tariff classification and customs valuation.

Under the proposed bill, all cargoes covered by a load port survey report shall be automatically exempted from physical and x-ray inspection except under specific instances.

Importers shall be allowed to lodge goods declaration and pay duties and taxes prior to arrival of cargo and the same shall be released upon arrival.” This is clearly trade facilitation and a cost saving measure for businesses since it ensures faster movement of goods through customs while also helping solve the port congestion problem,” Atienza said.

Atienza called for the immediate passage of the CMTA to curb smuggling and the entry of illicit goods and drugs.

“The drug problem and its accompanying consequence of higher crime rate is a national security issue which cannot be allowed to further deteriorate,” Atienza said.

“We cannot leave to the discretion of the BOC whether or not to implement a reform program such as this,” he added.

Former Customs commissioner Titus Villanueva is also lobbying for the accreditation of legitimate importers which comprise 80 percent of the country’s total imports,  and the conduct of pre-shipment inspection of non-accredited and illegitimate importers.

Villanueva pointed out that there would be no delay in the release of cargoes as their imports would be delivered directly to their warehouses.   “However, the BoC reserves the right to conduct random checks on their cargoes while in transit to prevent complacency on the part of the legitimate importers,” Villanueva said.

With the pre-shipment inspection of imports of the non-accredited importers compromising 20 percent of the country’s total imports, cases of misdeclaration, undervaluation and misclassification would be avoided, he added.

Villanueva proposed the creation of a risk management unit composed of individuals known for their impartiality and integrity under the Office of the President.  The unit will be tasked to implement the accreditation process and pre-shipment inspection scheme.

“The pre-shipment inspection and the accreditation process could be implemented altogether as a two-pronged anti-graft scheme by the BOC and could do so even without the need for legislation. Only a strong political will to weed out graft and corruption in the agency is needed,” Villanueva said.

The passage of the CMTA will make the Philippines compliant with the Revised Kyoto Convention and other international agreements.

The proposed measure will also exempt relief consignments from duties and taxes and enable a simplified customs procedure for efficient release of goods when there is a declaration of a state of calamity.